-% Target Defence from items is not the same as -% (Enhanced) Defence from skills: -% ED is applied with +% ED, -% TD is applied after this step.
When a level 87 Barbarian with negligible Attack Rating attacks an Ancient in Hell buffed by Madawc's level 12 Shout (+210% ED), he has 5% chance-to-hit: he still has 5% chance-to-hit after casting level 26 Battle Cry (-100% ED) since the Ancients still have +110% ED (210-100). However, equipping modified items with -200% TD (-100% TD against the Ancients) results in 95% chance-to-hit, since their total defence is reduced by 100%.
I've confirmed this in single player, and it could easily be confirmed in multi-player by equipping a weapon socketed with six Eth runes and attacking a high +% ED Barbarian of the same level: for example, if defence is four times AR without -75% TD, chance-to-hit will be 20%; with -75% TD, chance-to-hit will be 50%. If -% TD were simply subtracted from +% ED, then its impact on chance-to-hit would be negligible.